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Charter Acquisition Naysayers Have Their Day

Mari Silbey
10/15/2015

After a flood of goodwill filings from corporate citizens supporting Charter's acquisition of Time Warner Cable and Bright House Networks, opponents of the transactions are now bombarding the FCC with comments that argue the mergers should not be allowed.

The National Association of Broadcasters (NAB) kicked things off early in the week with a petition to the Federal Communications Commission (FCC) asking it to hold the merger applications "in abeyance" until the Commission has reviewed and reformed existing media ownership rules.

From the NAB filing: "The Commission has no legal or public policy basis for continuing to approve payTV mergers that tilt the competitive playing field against local broadcast TV stations subject to asymmetric FCC regulations uniquely disfavoring locally-oriented free television services."

Dish Network LLC (Nasdaq: DISH) then picked up the gauntlet on Tuesday with a comment submission suggesting that Charter Communications Inc. 's bid for Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks should be denied by regulators for the same reason that the government decided not to support Comcast's proposed acquisition; namely that the deals would not be in the public interest and would "hurt or destroy online video rivals, including the Sling TV OTT video service, through [New Charter's] control over the broadband pipe."

The coup de grace, however, came from AT&T Inc. (NYSE: T). Mere months after closing its own deal to buy DirecTV Group Inc. (NYSE: DTV), AT&T is now arguing that further consolidation of the cable industry could be damaging to the competitive landscape. In its filing with the FCC, AT&T was careful not to directly oppose the Charter mergers, but instead stated that the Commission should "review the transaction carefully and consider the impact of cable consolidation and coordination on emerging competition."


Want to know more about pay-TV market trends? Check out our dedicated video services content channel here on Light Reading.


Among AT&T's arguments, the telco notes that the FCC should carefully examine issues of content ownership by cable operators, and then it effectively calls out the cable industry for collusion with initiatives like the Cable WiFi consortium, and through the operation of CableLabs for cable-only research and development.

"For many years, cable companies have coordinated technology standards and R&D through CableLabs, a consortium formed explicitly to benefit the cable industry," submitted AT&T.

Unsurprisingly, CableLabs takes issue with AT&T's characterization. "All the work that we do is eventually made public," CableLabs CEO Phil McKinney pointed out in an interview.

Furthermore, the organization launched a subsidiary in 2012 specifically dedicated to moving technology out of CableLabs and into the public realm. Called NetworkFX, the subsidiary started out by opening up access to the cable industry's public key infrastructure (PKI) for managing secure broadband connections among devices. As McKinney tells it, however, NetworkFX has moved well beyond just PKI, and is even supporting a telecom customer today with cable-born technology. McKinney declined to provide further details, but was very clear that CableLabs is not the closed-door organization that AT&T has described.

The deadline has now passed for submitting comments to the FCC on the Charter transactions, but the debate about whether the mergers are helpful or harmful to the public will undoubtedly continue. Everyone in the industry has an opinion to air. (See also On Paper, Support Runs High for Charter/TWC.)

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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VernonDozier
VernonDozier
10/15/2015 | 4:28:43 PM
FCC's Open Internet Order
Seems like DishNetwork missed the FCC memo about non-segregation on cable networks.  It was called "Open Internet Order".

Additionally, all telecom providers have standards bodies.  DishNetwork has DVB and security cards based on Nagravision (whom I'm told DishNetwok is a financial backer of), AT&T and phones have GSM and the 3GPP/4GPP.   Cable Labs is structured similarily.  They are a non-profit.   It creates agreeable standards for interoperability then publishes the standards, and tests for compatibility to the standard. This increases reliability and a more consistent customer experience.  

If you compare CableLabs to a company like Apple and their AppleTV, it's much worse. There is no standard for connectivity in place, Apple customers have to switch service providers if their TV doesnt work correctly.   It probably makes more sense to fight Apple to open up their standard for iTunes Content Distribution.   That's a battle worth fighting.
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